Ala. Admin. Code r. 482-1-083-.07

Current through Register Vol. 43, No. 1, October 31, 2024

Section 482-1-083-.07 - General Provisions

(1) For the purpose of carrying out its obligations under this Plan, the Association shall be deemed to be a creditor of the insolvent HMO to the extent of assets attributable to covered contracts reduced by any amount collected by the Association as subrogee. All assets of the insolvent HMO attributable to covered contracts and all assets to which covered contract holders are given a right of priority shall be used to continue all covered contracts and to pay all contractual obligations of such HMO as required by the Act and this chapter.

(2) Upon the issuance of a proper court order placing a domestic HMO in receivership or placing a foreign HMO in ancillary receivership for rehabilitation or liquidation, all enrollees, unaffiliated health care providers for uncovered expenditures, beneficiaries and insured of such insolvent HMO, with respect to claims arising from and within the coverage of and not in excess of the applicable limits of evidences of coverages and other health care contracts issued by the insolvent HMO and the Alabama Health Maintenance Organization Guaranty Association shall be preferred creditors of said HMO.

(3)

1. Prior to the termination of any receivership, liquidation, or conservation proceeding, the court may take into consideration the contributions of the respective parties, including the Association, the shareholders and contract holders of the insolvent HMO, and any other party with a bona fide interest in making an equitable distribution of the ownership rights of such insolvent HMO. In such a determination, consideration shall be given the welfare of the contract holders of the continuing or successor HMO.

2. No distribution to stockholders, if any, of an insolvent HMO shall be made until and unless the total amount of assessments levied by the Association with respect to such HMO have been fully recovered by the Association.

(4) Any person having a claim against any HMO under any provision in an insurance policy or in an evidence of coverage other than one issued by an impaired or insolvent HMO, when such claim is also a contractual obligation under the terms of the Act and the Plan, shall be required to exhaust first his rights under such other insurance policy, contract or evidence of coverage. Any amount payable on a contractual obligation under the Act or this Plan shall be reduced by the amount of any recovery under such other insurance policy, contract or evidence of coverage. This provision does not apply to any insurance policy which does not contain a coordination of benefits clause or to which Regulation No. 56 does not apply, such as individual indemnity policies.

Author: Commissioner of Insurance

Ala. Admin. Code r. 482-1-083-.07

New Rule: Filed October 3, 1988; effective October 20, 1988. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, § 27-7-43.

Statutory Authority:Code of Ala. 1975, §§ 27-2-17, 27-21A-19, 27-21A-12(i).